Dip Buying Remains Strong

Bulls continue to relentlessly buy the dips as last week's dip back to support was followed by an explosive move back to the latest highs yesterday. What is most interesting here is the number of analysts who continue to doubt this market's move and the number of traders who continue to short the highs. In other words, this bull market has not yet reached the "point of recognition" where nervous retail longs finally realize that this is indeed a bull market and put money to work. They usually do so at the top, right before a correction. We have stopped trying to predict where this market may turn. Right now we strongly advice just taking what this market is giving – good long set ups – and leaving the top calling to those who are likely to continue fueling this move with their short covering. Protective stops should be used to take us out, not our human tendencies towards fearing the unknown. We read a great quote the other day: "if the market rewarded human nature, then nearly everyone would succeed." The wisdom behind that quote speaks volumes.